Methods of Laundering Money
Simply put, money laundering is the process of obscuring the source of
obtained money. Whether the money was legitimately earned or the product
of illegal activity makes no difference. There are many laws against money
laundering in general as well as laws pertaining to any specific techniques
used or associated with the crime. Methods for money laundering typically
involve three steps: placement, layering and integration.
Laundering "Dirty Money"
The most commonly associated concept with money laundering is that the
money being concealed originates from unlawful acts. This is referred
to as "dirty money," or any profits made during the course of
any separate criminal activity. If your circumstance involves this type
of money laundering you can also face additional criminal charges. The
steps are typically conducted as follows:
- Illegitimate income is first discreetly introduced into a legitimate financial
system. For example, this placement can occur when businesses are purchased
or created. As a result, suspicious amounts of money become more difficult
for the IRS to detect because there is a believable, and legal, source
- Illicit funds are then mixed with actual profits. Businesses have documented
financial transactions and must also pay taxes and this step, called layering,
further camouflages illegal sources from potential audits.
- When illegal funds have been layered sufficiently, the "clean money"
can then be introduced back into the economy. This final stage is known
as integration and makes distinguishing legal and illegitimate funds incredibly
Even if you have not participated in a criminal activity that earns a profit,
you can still be prosecuted for money laundering if you make certain attempts
to conceal income. Often the motive for laundering legal income involves
tax evasion and a federal court has the ability prosecute you for both
tax fraud and money laundering. The most common form of this type of money
laundering involves oversea bank accounts that go unreported to the U.S.
government. There is also a significant chance that several other federal
crimes were committed in the course of transferring money to offshore sources.
Do I need a Los Angeles money laundering attorney?
Given the global crackdown on money laundering, it becomes crucial to know
your rights and how to defend yourself. Under 18 U.S.C. Section 1956,
if you are alleged to have laundered money, in any form, you can suffer
fines either up to $500,000 or twice the amount of money that was laundered,
whichever is larger. You also face prison sentences of up to 20 years.
Offenses typically associated with money laundering, such as RICO, tax
fraud, embezzlement or other
federal charges, can also be charged in conjunction with money laundering and can significantly
heighten punishments. It is also important to know that suspected money
launderers are meticulously investigated by a variety of government and
financial regulating forces. Intricate laws, hard-hitting law enforcement
agencies and disastrous penalties call for the industrious legal advice
our firm can offer. Do not wait until it is too late.
Contact our firm today.